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Why is gold on the frontpage of HN? Not because of the strenght of gold itself, but because of the weakness of the other actors in this global tragedy; the curr

Why is gold on the frontpage of HN? Not because of the strenght of gold itself, but because of the weakness of the other actors in this global tragedy; the currencies and the political class governing them. Aks the people of Ireland, Spain, Italy, Greece, Cyprus, Hungary, Vietnam, Iran, Argentina, etc about their faith in their currency and their leaders...

rmc 14y ago
Irish person here. There is no distrust in the currency or banking system. No one's doing a run on the banks here. Ireland was a traditional 19th century bubble
- digitalengineer 14y ago
  Ireland was also a traditional 2007 housing bubble ;-) The way the Cyprus debt was taken care of makes smart people of other indebted country's think twice about their savings. Yahoo News: Big depositors at Cyprus' largest bank may be forced to accept losses of up to 60 percent, far more than initially estimated under the European rescue package to save the country from bankruptcy, officials said Saturday. Deposits of more than 100,000 euros ($128,000) at the Bank of Cyprus will lose 37.5 percent in money that will be converted into bank shares, according to a central bank statement. In a second raid on these accounts, depositors also could lose up to 22.5 percent more, depending on what experts determine is needed to prop up the bank's reserves. The experts will have 90 days to figure that out. The remaining 40 percent of big deposits at the Bank of Cyprus will be "temporarily frozen for liquidity reasons," but continue to accrue existing levels of interest plus another 10 percent, the central bank said. http://news.yahoo.com/bank-cyprus-big-savers-lose-60-percent-135608668--finance.html http://news.yahoo.com/bank-cyprus-big-savers-lose-60-percent... Le Monde: Anything is possible now how much confidence is it possible to have in the single currency and the sacrosanct guarantee of bank deposits when customers of a European bank can wake up to find that part of their savings has disappeared overnight? http://mondediplo.com/2013/04/01nicosia http://mondediplo.com/2013/04/01nicosia I'd say (the loss of) confidence is one of the main reasons there is so much talk about gold.
  - rmc 14y ago
    Ireland was also a traditional 2007 housing bubble ;-) Sure, it was a housing bubble that popped around then. My point was that it wasn't fancy financial instruments or arcane hidden scams that broke it, it was an old fashioned "This thing (property) can only go up in value! Invest in it now, keep making more of those things (houses), invest now and you'll be able to flip your asset later for a higher price! It can't go down in value!" type bubble. If everything was on bitcoin, you still could have had the irish property bubble happen, just like how there was bubbles like that when the currencies were gold based.
    - digitalengineer 14y ago
      I have to respectfully disagree, …the expansion of money through debt is unsustainable and necessarily fuels and creates economic bubbles. This concentrates wealth in the hands of private banks as the populace is forced into debt simply to own a home and educate their children, hoping that the loans can be repaid by others going into debt in greater amounts later to purchase the assets they themselves have purchased through incurring large amounts of personal debt. However, debt expansion leads to price appreciation of assets through speculation as the financial market becomes riskier and this process is unsustainable in the long run, with the last cycle of indebted being wiped out when they cannot find anyone to buy the assets they themselves have purchased by going into massive debt. http://wiki.mises.org/wiki/Criticism_of_fractional_reserve_banking http://wiki.mises.org/wiki/Criticism_of_fractional_reserve_b...

rmc 14y ago

Irish person here. There is no distrust in the currency or banking system. No one's doing a run on the banks here. Ireland was a traditional 19th century bubble

digitalengineer 14y ago
Ireland was also a traditional 2007 housing bubble ;-) The way the Cyprus debt was taken care of makes smart people of other indebted country's think twice about their savings. Yahoo News: Big depositors at Cyprus' largest bank may be forced to accept losses of up to 60 percent, far more than initially estimated under the European rescue package to save the country from bankruptcy, officials said Saturday. Deposits of more than 100,000 euros ($128,000) at the Bank of Cyprus will lose 37.5 percent in money that will be converted into bank shares, according to a central bank statement. In a second raid on these accounts, depositors also could lose up to 22.5 percent more, depending on what experts determine is needed to prop up the bank's reserves. The experts will have 90 days to figure that out. The remaining 40 percent of big deposits at the Bank of Cyprus will be "temporarily frozen for liquidity reasons," but continue to accrue existing levels of interest plus another 10 percent, the central bank said. http://news.yahoo.com/bank-cyprus-big-savers-lose-60-percent-135608668--finance.html http://news.yahoo.com/bank-cyprus-big-savers-lose-60-percent... Le Monde: Anything is possible now how much confidence is it possible to have in the single currency and the sacrosanct guarantee of bank deposits when customers of a European bank can wake up to find that part of their savings has disappeared overnight? http://mondediplo.com/2013/04/01nicosia http://mondediplo.com/2013/04/01nicosia I'd say (the loss of) confidence is one of the main reasons there is so much talk about gold.
- rmc 14y ago
  Ireland was also a traditional 2007 housing bubble ;-) Sure, it was a housing bubble that popped around then. My point was that it wasn't fancy financial instruments or arcane hidden scams that broke it, it was an old fashioned "This thing (property) can only go up in value! Invest in it now, keep making more of those things (houses), invest now and you'll be able to flip your asset later for a higher price! It can't go down in value!" type bubble. If everything was on bitcoin, you still could have had the irish property bubble happen, just like how there was bubbles like that when the currencies were gold based.
  - digitalengineer 14y ago
    I have to respectfully disagree, …the expansion of money through debt is unsustainable and necessarily fuels and creates economic bubbles. This concentrates wealth in the hands of private banks as the populace is forced into debt simply to own a home and educate their children, hoping that the loans can be repaid by others going into debt in greater amounts later to purchase the assets they themselves have purchased through incurring large amounts of personal debt. However, debt expansion leads to price appreciation of assets through speculation as the financial market becomes riskier and this process is unsustainable in the long run, with the last cycle of indebted being wiped out when they cannot find anyone to buy the assets they themselves have purchased by going into massive debt. http://wiki.mises.org/wiki/Criticism_of_fractional_reserve_banking http://wiki.mises.org/wiki/Criticism_of_fractional_reserve_b...